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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15610
Experience:  15years with H & R Block. Divisional leader, Instructor
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I just received a large sum of money from a 457 deferred

Customer Question

I just received a large sum of money from a 457 deferred compensation from my recently deceased aunt. She was an employee of the NY City government. The government withheld federal and state taxes and said it will report this on a 1099. Is this money taxable as my personal income or is it taxable to the estate of my aunt
Submitted: 1 year ago.
Category: Tax
Expert:  Robin D. replied 1 year ago.


If you inherited your aunt's account then you are taxed the same way she would have been taxed on the distribution had she not passed away. The account was a deferred account which menas not taxable until distributed.

You will receive a 1099R and on that the taxable portion will be reported as well as the taxes withheld.

You include this with your income on your tax return for the year.

There should be a Code 4 on the 1099R that denotes this will not be subject to any additional penalty for early distribution. The tax withheld will act as a payment for tax.

Please accept my condolences regarding the passing of your aunt.

If my answer addressed your question please rate below or above (let me know if you have difficulty as I believe the system changed), if you need more information reply below.

Expert:  Robin D. replied 1 year ago.

Please advise Charles if you need more information or rating in a positive way is acceptable.

Expert:  Robin D. replied 1 year ago.

Post below please.